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Postal woes need action

Published on May 14, 2001.

The U.S. Postal Service is in trouble. The advertising and publishing industries that depend on it are publicly fed up, and rates are set to increase for the second time this year. With the future looking like more of the same, the clamor is building-and rightly so-for Congress to take action.

If shouting alone were enough to get attention in Washington, the din last week easily could be heard up and down Pennsylvania Avenue. The Postal Service Board of Governors complained about the independent Postal Rate Commission, which it said made the coming July 1 rate hikes necessary by ignoring Postal Service revenue needs. The Magazine Publishers of America and Direct Marketing Association lambasted the Postal Service for not being able to control its costs.

The Postal Service board, MPA and DMA, however, agreed on one thing: The time has come for Congress to craft changes to the 30-year-old structure created by the Postal Reorganization Act. While a House committee has recently held hearings, there are no signs yet that Congress and the Bush administration are ready to tackle the issue.

The Postal Reorganization Act was a major advance when it was passed. It abolished the old Post Office Department and largely ended decades of congressional micromanagement and political patronage. It gave the new "independent" Postal Service a more corporate structure, its management reporting to a board appointed by the president. It ordered the Postal Service to operate without taxpayer subsidies (while continuing universal delivery to all U.S. addresses at a single rate for a first-class letter). In many ways it's been successful; yet today the Postal Service and key user groups are now practically at blows with one another.

Magazine publishers and the many companies engaged in marketing through the mail no longer are confident postal management is ready to do what it takes-no matter how painful-to control costs and protect loyal business customers from excessive rate hikes. For its part, Postal Service management counters that few private business managers would tolerate a system that made pricing decisions dependent on unpredictable review by an outside monitoring agency and subject to months of delay. The rates going into effect July 1 were first proposed 16 months ago.

While publishers, mailers and advertisers have enough to do in running their own businesses-especially now-they can't ignore what's going on at the Postal Service. It's still a key avenue, and a key cost, for companies that need to reach consumers. Industry task forces need to hammer out proposals for how a new Postal Service could operate. And Congress needs to be told to act.